SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Fiscal Year Ended June 30, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period From ___________ to_____________.
Commission File No.: 0-23712
GRAND SLAM TREASURES, INC.
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(Exact name of registrant as specified in its charter)
Nevada 91-1395124
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
222 East State Street, Eagle, ID 83616
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(Address of principal executive offices) (Zip Code)
(208) 342-8888
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Registrant's telephone number, including area code
None
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Securities to be registered under Section 12(b) of the Act
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
The aggregate market value of voting Common Stock held by non-affiliates of the
Registrant was $1,995,065as of October 1, 2000. The Registrant does not have any
outstanding non-voting equity.
On October 1, 2000, the Registrant had outstanding 17,551,088 of voting Common
Stock, $.001 par value.
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INDEX
FORM 10-KSB
YEAR-ENDED JUNE 30, 2000
Page
Item Description Number
---- ----------- ------
1 Description of Business.............................................3
2 Properties..........................................................6
3 Legal Proceedings...................................................6
4 Submission of Matters to Vote of Security Holders...................6
5 Market for Registrants Common Equity and Related
Stockholder Matters.................................................6
6 Management's Discussion and Analysis or Plan of Operations..........7
7 Financial Statements................................................8
8 Changes in and Disagreements with Accountants on Accounting
And Financial Disclosure............................................9
9 Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(A) of the Exchange Act...................9
10 Executive Compensation.............................................10
11 Security Ownership of Certain Beneficial Owners and Management.....11
12 Certain Relationships and Related Transaction......................11
13 Exhibits and Reports on Form 8-K...................................11
Signatures.........................................................12
Index to Financial Statements.....................................F-1
Financial Statements..............................................F-2
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
Grand Slam Treasures, Inc., (the "Company") a Nevada corporation is engaged
in the purchase and marketing of sports memorabilia and recovered sunken
treasure. In addition, the Company is developing various entertainment
properties within the United States. The Company's operations are located in
Eagle, Idaho.
History and Development of the Company
Northwest Parks LLC ("NWP") was formed as a limited liability company on
March 28, 1996 in the State of Idaho. On March 28, 1996, NWP acquired a 16.67%
interest in BW Partners LLC (BWP) and certain other assets and rights valued at
$48,014, based upon the amounts recorded by BWP from a member in exchange for a
25% interest in NWP. The Company from whom the BWP interest was acquired is a
corporation in which a managing member of NWP held a 20% interest at the time of
the acquisition. On January 8, 1998, NWP acquired the remaining 83.33% interest
in BWP in exchange for an 8.75% interest in NWP.
NWP formed Sweetwater Holdings LLC ("SWH") on January 9, 1997, for the
purposes of acquiring approximately 12 acres of land and a dwelling in Canyon
County, Idaho, known as The Idaho Center property. NWP acquired a 99% interest
in SWH, with the remaining 1% held by a minority member of NWP. In April 1999,
SWH transferred approximately 1.5 acres of the property to NWP and NWP sold SWH
and the remaining land of approximately 10.5 acres to a third party.
NWP participated in the formation of Crossroads Convenience Center LLC
("CCC") on June 18, 1998. Based upon the operating agreement, the Company owned
a 10% interest in CCC, after transferring a 15% interest in CCC to an individual
who is a minority member in the Company in partial satisfaction of interest
accrued on a note that was owed to the individual by NWP. NWP's interest in CCC
was acquired in exchange for a 1.5 acres of property acquired from SWH and
certain development costs incurred on CCC's behalf.
Prior to fiscal year 2000, CCC had been developing the construction of an
automobile service center and convenience store and had no significant
operations. The Company served as the construction manager for the center for
which it received fees of approximately $181,000 and $165,000 for the years
ended June 30, 2000 and 1999, respectively. The service center and convenience
store commenced operations in August 1999.
In January 1999, NWP, along with its two managing members, formed Magic
Valley Parks LLC (MVP), with NWP acquiring a 98% ownership interest. In April
1999, NWP sold a 4.25% interest in MVP to two members of NWP for $145,000. On
December 16, 1999 this 4.25% minority interest in MVP was exchanged for
interests totaling 1.45% of NWP, at which time MVP terminated operations.
Developments During Fiscal Year 2000
On December 17, 1999, the members of NWP exchanged 100% of their member
interests for 80% of the outstanding common stock of Parks America! Inc.
("Parks") (formerly Wincanton Corporation), a public company. Parks had ceased
operations at the time of the exchange. Under the terms of the exchange, NWP is
considered the acquiring entity.
On June 24, 2000, Parks changed its name to Grand Slam Treasures, Inc.
The sports memorabilia was acquired in exchange for stock in the Company
and is valued at the estimated value of the inventory on the date of
acquisition. The inventory is held for sale by the Company which is evaluating
its various options for the sale of the memorabilia. The Company continually
re-evaluates the estimated recovery value of the memorabilia and makes
adjustments as necessary when it determines that the value has been impaired.
During the year ended June 30, 2000, the Company acquired a substantial portion
of the artifacts and treasure of a Spanish galleon that sank in deep water south
of the Dry Tortugas in the Florida Keys in 1622. The artifacts and treasure have
both archeological and economic value. The Company acquired the treasure in
exchange for common stock of the Company with the value based upon an appraisal
of the treasure and negotiations between the parties. The Company is assessing
its options for maximizing the value of the treasure. Management estimates that
the value originally assigned to the treasure was the minimum value on the date
of the exchange. The Company continually re-assesses the value of the treasure
and will make any adjustments it deems necessary if it determines that the
originally recorded value of the treasure has been impaired.
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At June 30, 2000, the Company owns a 40.75% interest in the Crossroads
Convenience Center LLC (CCC) which is located on "The Idaho Center" property in
Canyon County, Idaho. The Company's 10% ownership interest at June 30, 1999 was
increased by 30.75% to 40.75% during 2000 in exchange for an equity interest in
NWP, which was subsequently exchanged for 11,090 shares of the Company's common
stock.
On April 2, 1998, the Company paid $50,000 for an option to purchase 68
acres of land in Canyon County, Idaho. Under the terms of the option, the
Company had the right to purchase the land for $2.4 million during the one year
period expiring April 2, 1999. The option was extended for a one year period
with a purchase price of $2.64 million by payment of an additional $50,000,
payable $3,000 per month for six months, $4,000 per month for five months and
$12,000 as a balloon payment in April, 2000. The agreement provided for an
additional one year extension period for $50,000, payable monthly, with the
option price increased to $2.9 million. The amounts paid for the option and all
extensions were non-refundable and were to be applied against the purchase price
upon settlement. On April 20, 2000, prior to the balloon payment, the Company
entered into a Settlement Agreement whereby the Company was released from any
and all obligations under the option. As a result, all amounts that had
previously been paid under the option along with the related capitalized project
development costs were charged to general and administrative expense during the
year ended June 30, 2000. The Company believed that the development of the site
was not progressing quickly enough to justify additional expenditures on these
land parcels. Therefore, management terminated the agreement for the land until
such time as the project elements are developed further. There are alternative
land sites that are available.
In September 1998, the Company paid $1,000 for an option to purchase 32
acres of land in Burly, Idaho, at a purchase price of $1.5 million. The option
expired in May 1999. In August 1999, the Company obtained an extension of the
option period to May 30, 2000 for an additional $1,000. The amounts paid for the
option and all extensions were non-refundable and were to be applied against the
purchase price upon settlement. During the year ended June 30, 2000, the Company
abandoned the project for which the land option was related. Consequently, all
amounts that had previously been paid under the option along with the related
capitalized project development costs were charged to general and administrative
expense during the year ended June 30, 2000. This project was abandoned because
local municipalities failed to approve needed infrastructure.
Products
Through the end of the fiscal year the Company was a development stage
company. During the last six months of the fiscal year, its main activity has
been developing and accumulating inventory to be resold through auctions and
through Internet sites. The Company is working closely with a software developer
to establish a consumer-friendly web site for the marketing and sale of
products. The Company expects that an online site will be ready for consumer use
this year.
The Company intends to market products that are of historical, cultural,
and artistic value. Some of the products the Company has acquired include:
Recovered Sunken Treasure
During the year ended June 30, 2000, the Company acquired a substantial
portion of the artifacts and treasure of a Spanish galleon that sank in deep
water South of the Dry Tortugas in the Florida Keys in 1622. The artifacts and
treasure have both archaeological and economic value. The Company acquired the
artifacts and treasure in exchange for common stock of the company with the
value based upon an appraisal of the treasure and negotiations between the
parties. The Company is considering its options for maximizing the value to be
realized from the treasure. Management estimates that the value originally
assigned to the treasure was a minimum value at the time of the exchange. The
Company continually re-evaluates the value of the treasure and will make any
adjustments it deems necessary if it determines that the originally recorded
value of the treasure has been impaired.
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This recovered treasure is unique in that it was a deep-water recovery
(nearly 1,500 ft.) and as such contains certain artifacts that are not found in
other treasure recoveries.
The Company intends to secure additional treasures or artifacts either by
acquisition or by acting as a sales agent for commission. To this end, the
management is currently negotiating with other treasure owners.
Sports Memorabilia
The Company acquired a sizable collection of sports memorabilia from an
active collector and reseller of these products. The Collection includes a wide
range of articles such as jerseys, shoes and uniforms as well as approximately
50,000 sports cards.
The Company intends to acquire additional sports collections and market
them in due course.
Regional Theme Parks
The Company is actively engaged in negotiations to secure the purchase of
three regional theme parks. These parks are individually owned and range in
attendance from 250,000 to 300,000 visitors per year. Should the Company be
successful in securing these properties, the impact on operating performance
will be significant. The Company, however, has not secured financing for the
purchase of these parks.
Additionally, the Company is developing a site to construct a regional
theme park. This project development is expected to continue throughout the
fiscal year.
Sales and Marketing
The Company's marketing and sales activities are in the formation stages.
The Company is still building relationships and forming alliances for future
operations. The current employees attend trade fairs, seminars and exibitions to
keep abreast of new developments and market trends, and they have constant
contact with other industry individuals who are assisting the Company in these
early stages. Because of the Company's limited funds and developmental stage,
the Company was in several instances, issued its common stock to such
individuals as both compensation and an incentive to assist the Company.
During the upcoming fiscal year, the Company will develop a sales team and
Internet strategy to optimize sales and net income.
The Company has engaged Market Management International, Inc. to develop
research, marketing plans and materials, press releases and promotional
releases. The Company secured these multi-year services through the issuance of
its common shares.
Competition
The competition for the treasure articles is quite fragmented. Most of the
outlets are local retailers located in Florida. There are various web sites that
are maintained by treasure owners, but they are poorly marketed and difficult to
find.
From time to time some of the auction retailers will include certain items
within the items that they offer for sale. For theme parks, the competition is
intense on a national level. However, because the parks that are targeted by the
Company are local or regional parks, the competition is limited to the other
types of entertainment, rather than any direct competition from other parks.
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Employees
As of October 1, 2000 the Company employed a total of two (2) persons on a
full-time basis. In addition, depending on client demand the Company contracts
with persons on a temporary, part-time basis. None of the Company's employees
are represented by a labor union. The Company believes that its relations with
its employees are good.
Significant Customers
Because of the Company's development stage, it has not developed a customer
base. This is to be a significant area of the Company's activities during its
next fiscal year.
OTHER INFORMATION
ITEM 2. - PROPERTIES
The Company leases approximatley 2,500 square feet of office space in
Eagle, Idaho for use as its corporate headquarters. The lease is a five year
lease which runs from March 1, 2000 and expires on February 28, 2005. The
monthly rental for the first year is $2,550 and increases by 5% for each
subsequent year. The lease contains an option to the Company for renewal for an
additional five year period under similar terms and conditions.
ITEM 3. - LEGAL PROCEEDINGS
There are no legal proceedings currently pending against the Company.
ITEM 4. - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
On April 24, 2000, the Company held a shareholder meeting to approve
changing the Company's name from Parks America! Inc. to Grand Slam Treasures,
Inc. and to change the Company's state of incorporation from Washington to
Nevada. Both measures were adopted by the shareholders.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.
The Company's common stock trades on the OTC Bulletin Board under the
symbol "GRST". Prior to December 31, 1999, trading in the Company's common stock
was limited and sporadic. The following chart represents the closing high and
low bid price for each fiscal quarter beginning with the first quarter of 2000:
High Low
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Quarter s ended March 31, 2000 15 12
Quarters ended June 30, 2000 13 1/4 1 3/4
As of October 1, 2000, the Company's common stock was held of record by 851
persons.
The Company has never paid a cash dividend. Any dividends in the future
will be dependent on the Company's profitability, its need for working capital,
the Company's strategic objectives and other factors within the direction of the
Board of Directors.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This report contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of
the Securities Exchange Act of 1934, as amended. The Company's actual
results could differ materially from those set forth on the forward looking
statements as a result of the risks set forth in the Company's filings with
the Securities and Exchange Commission, general economic conditions, and
changes in the assumptions used in making such forward looking statements.
Grand Slam Treasures, Inc. (the "Company") is a content-based entertainment
company with assets in treasure, collectibles, music and video. It intends to
develop, acquire and market these assets and others to the general public and
collectors. The primary sales mechanisms will be Internet auction and sales,
corporate sponsored traveling exhibitions and tours, and specialty private
transactions. As of June 30, 2000, the Company was still classified as a
development stage company.
YEAR ENDED JUNE 30, 2000 COMPARED TO THE YEAR ENDED JUNE 30, 1999
Revenue
Revenue for the fiscal year ended June 30, 2000 decreased by $426,563 or
99.1% to $3,376 from $429,939 for the corresponding prior fiscal year. This
decrease was due to one time property transactions that occurred in the prior
fiscal year.
During both fiscal years the Company was a development stage company with
no sales.
Research and Marketing Expenses
Research and marketing expenses for the fiscal year ended June 30, 2000
increased $2,124,936 or 100% from $0 in the corresponding prior year. This
increase was due to expenses incurred regarding the acquisition of Wincanton
Corporation. These expenses are primarily comprised of public relations
expenses, market research and materials expenses, and investor relations
expenses.
General and Administrative Expenses
General and administrative expenses for the fiscal year ended June 30, 2000
increased $773,744 or 434% to $952,017 from $178,273 in the prior year. This
increase resulted from the expanded activities of the development and
acquisition of products and includes large increases in costs for legal, travel
and professional services.
Interest Expense
Interest expense decreased by $103,595 or 97.4% to $3,680 for the fiscal
year ended June 30, 2000 from $107,275 for the prior fiscal year. This decrease
was a direct result of land sales in the prior year.
Changes in Financial Condition, Liquidity and Capital Resources
For the past twelve months, the Company has funded its operating and
capital requirements with the issuance of common stock, the proceeds of
construction management fees and loans from related parties. As of June 30, 2000
the Company had cash of $2,682 and a surplus in working capital of $1,983,803.
This compares with cash of $60,266 and a deficit in working capital of $91,082
as of June 30, 1999.
Net cash used in operating activities increased to $438,451 for the fiscal
year from $368,186 for the prior year. The increase is attributable to the
increased development and inventory acquisition activities.
Net cash provided by financing activities increased to $265,747 for the
fiscal year ended June 30, 2000, from a deficit of $775,404 in the prior fiscal
year. This increase in primarily due to the reduction in loans in the prior
year, and equity contributions in the current fiscal year.
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To provide for its working capital requirements, during the next twelve
months the Company will need to begin sale auctions and Internet operations or
develop additional lending and equity sources without which the Company will be
unable to meet its business plans.
Impact of Inflation
To date, the Company has not experienced any impact from inflation and does not
anticipate any such impact in the foreseeable future.
Factors That May Affect Future Results.
Dependence on Key Personnel - The Company's performance is substantially
dependent on the performance of its executive officers and other key employees
and its ability to attract, train, retain and motivate high quality personnel,
especially highly qualified technical and managerial personnel. The loss of the
services of any of its executive officers or key employees could have a material
adverse effect on its business, results of operations or financial condition.
Competition for talented personnel is intense, and there can be no assurance
that the Company will be able to continue to attract, train, retain or motivate
other highly qualified technical and managerial personnel in the future.
Government Regulation and Legal Uncertainties The Company is not currently
subject to direct regulation by any government agency, other than regulations
applicable to businesses generally. However, governmental regulators may, in the
future, seek to impose regulations on Internet activities. There are currently
few laws or regulations directly applicable to access to or commerce on the
Internet. Due to increasing popularity and use of the Internet, however, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet, covering issues such as user privacy, pricing, characteristics and
quality of products and services. The adoption of any additional laws or
regulations may also decrease the growth of the Internet, which could in turn
decrease the demand for the Company's products and services or could increase
the Company's cost of doing business. Moreover, the applicability to the
Internet of a range of existing laws in domestic and international jurisdictions
governing issues such as commerce, taxation, property ownership, defamation and
personal privacy is uncertain and will likely evolve over the course of many
years. Any such new legislation or regulation or application or interpretation
of existing laws, including tax laws, could have an adverse effect on the
Company's business, results of operations and financial condition.
Risks Inherent to the Company's Acquisition Strategy - The Company has in the
past, and intends in the future, to expand through the acquisition of
businesses, technologies, products and services. Acquisitions may result in the
potentially dilutive issuance of equity securities, the incurrence of additional
debt, the write-off of in- process research and development or software
acquisition and development costs, and the amortization of goodwill and other
intangible assets. Any such adjustment could result in an increase in the amount
of goodwill recorded, which would result in higher amortization expenses and,
therefore, adversely affect the Company's operating results. Further,
acquisitions involve a number of special problems, including difficulty
integrating technologies, operations and personnel and diversion of management
attention in connection with both negotiating the acquisitions and integrating
the assets. There can be no assurance that the Company will be successful in
addressing such problems. In addition, growth associated with numerous
acquisitions places significant strain on the Company's managerial and
operational resources. The Company's future operating results will depend to a
significant degree on its ability to successfully manage growth and integrate
acquisitions. Furthermore, many of the Company's investments are in early-stage
companies, with limited operating histories and limited or no revenues, there
can be no assurance that the Company will be successful in developing such
companies.
ITEM 7. FINANCIAL STATEMENTS.
The financial statements of the Company, together with the independent
auditors' report thereon of a professional corporation, Aronson, Fetridge &
Weigle, appear on pages F-2 through F-18 of this report. See Index to Financial
Statements on page F-1 of this report.
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
As a result of the acquisition of Parks America! Inc. by the Company, the
Company dismissed Mark Bailey & Co., Ltd. its prior auditors and retained the
existing auditing firm of Parks America! Inc., Aronson, Fetridge & Weigle.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
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Robert L. Klosterman 54 President, Chief Executive Officer, and Director
Larry L. Eastland 57 Chairman of the Board of Directors, Chief
Financial Officer
Mark D. Stubbs 50 Director
The directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement or
understanding between any of the directors or officers of the Company and any
other person pursuant to which any director or officer was or is to be selected
as a director or officer.
The directors and officers will devote full time to the Company's affairs
on an "as needed" basis, which, depending on the circumstances, could amount to
as little as two hours per month, or more than forty hours per month, but more
than likely will fall within the range of five to ten hours per month.
Biographical Information
Larry L. Eastland. Larry L. Eastland has served as Chairman of the Board of
Directors since the Company acquired Northwest Parks LLC in January of 2000.
Since its inception in 1996, Dr. Eastland has been employed as a Managing Member
of Northwest Parks LLC. Dr. Eastland holds a Ph.D in Political Science from the
University of Southern California.
Robert L. Klosterman. Robert L. Klosterman has served as President and
director since the Company acquired Northwest Parks LLC in January of 2000.
Since its inception in 1996, Mr. Klosterman has been employed as a Managing
Member of Northwest Parks LLC. Mr. Klosterman is also a certified public
accountant.
Mark D. Stubbs. Mark D. Stubbs was elected as a director of the Company in
September 2000. Mr. Stubbs is an attorney practicing law in Twin Falls, Idaho.
Mr. Stubbs was a partner in the firm of Sudweeks, May, Stubbs Browning & Kershaw
in Twin Falls, Idaho from 1995 to 1998 when he resigned to establish his own
practice.
Committees and Attendance of the Board of Directors
In order to facilitate the various functions of the Board of Directors, the
Board has created a standing Audit Committee and a standing Compensation
Committee.
The functions of the Company's Audit Committee are to review the Company's
financial statements with the Company's independence auditors; to determine the
effectiveness of the audit effort through regular periodic meetings with the
Company's independent auditors; to determine through discussion with the
Company's independent auditors that no unreasonable restrictions were placed on
the scope or implementation of their examinations; to inquire into the
effectiveness of the Company's financial and accounting functions and internal
controls through discussions with the Company's independent auditors and
officers of the Company; to recommend to the full Board of Directors the
engagement or discharge of the Company's independent auditors; and to review
with independent auditors the plans and results of the auditing engagement. The
sole member of the Audit Committee is Mr. Mark Stubbs.
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The functions of the Company's Compensation Committee include reviewing the
existing compensation arrangements with officers and employees, periodically
reviewing the overall compensation program of the Company and recommending to
the Board modifications of such program which, in the view of development of the
Company and its business, the Committee believes are appropriate, recommending
to the full Board of Directors the compensation arrangements for senior
management and directors, and recommending to the full Board of Directors the
adoption of compensation plans in which officers and directors are eligible to
participate and granting options or other benefits under such plans. The sole
member of the Compensation Committee is Mr. Mark Stubbs.
The Board of Directors does not have a standing nominating committee or a
committee performing similar functions.
During the year ended June 30, 2000, the Board of Directors held four
formal meetings, including telephonic meetings, and acted through unanimous
written consent on other occasions. Because the Audit Committee and the
Compensation Committee were formed near the end of the fiscal year, neither
Committee met during the year ended June 30, 2000. Each director (during the
period in which each such director served) attended at least 75% of the total
number of meetings of the Board of Directors.
Compensation of Directors
Each non-employee director of the Company is paid an initial fee of 50,000
shares of the Company's common stock. The Company also reimburses each director
for all expenses of attending such meetings.
No additional compensation of any nature is paid to employee directors.
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ITEM 10. EXECUTIVE COMPENSATION
The Compensation payable to the Company's officers and directors for the
current fiscal year is as follows:
Years Ended June 30, 2000 Years Ended June 30, 1999
------------------------- -------------------------
Larry L. Eastland $141,084 $65,000
Robert L. Klosterman 89,750 15,000
Neither of the two officers of the Company have employment contracts,
although such contracts are presently being negotiated.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of October 1, 2000 the number of shares
of common stock owned of record and beneficially by executive officers,
directors, persons who hold 5% or more of the outstanding common stock of the
Company, and by all officers and directors as a group:
Name Number of shares Percent of
and Address Owned Beneficially Class Owned
------------ ------------------ -----------
Robert L. Klosterman
1901 W. Spanish Bay Dr.
Eagle, ID 83616 4,595,627 26.18%
Larry L. Eastland
2075 Belgeave Way
Eagle, ID 83616 4,196,867 23.91%
------------ ---------
All officers and directors as
a group (2) persons 8,792,494 50.09%
============ =========
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Indemnification of Officers and Directors
As permitted by Nevada law, the Company's Articles of Incorporation provide
that the Company will indemnify its directors and officers against expenses and
liabilities they incur to defend, settle, or satisfy any civil or criminal
action brought against them on account of their being or having been Company
directors or officers unless, in any such action, they are adjudged to have
acted with gross negligence or willful misconduct. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable.
Conflicts of Interest
Other than as disclosed in the above, the Company does not believe that any
other conflicts of interest exist among the officers, directors or shareholders
in any material respect. The Company reviews all potential conflicts of interest
that comes to its attention and has directed all officers and directors and key
personnel to disclose any anticipated conflicts of interest before they arise.
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The Exhibits listed below are filed as part of this Annual Report.
Exhibit No. Document
2.1 Articles of Merger of Parks America! Inc.
(Washington Parent) into Parks America! Inc. (Nevada Subsidiary)
3.1 Articles of Incorporation - Parks America! Inc.
3.2 Restated Articles of Incorporation
3.3 Bylaws
10.1 Lease - office facility in Eagle, Idaho
27.1 Financial Data Schedule
(b) Reports on Form 8-K
1. April 12, 2000 - reporting change in control of the Registrant and
name change
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GRAND SLAM TREASURES, INC.
By: /s/ Robert L. Klosterman
----------------------------------------
Robert L. Klosterman
(Principal Executive and Financial Officer
and Director)
Date: October 10, 2000
By: /s/ Larry L. Eastland
----------------------------------------
Larry L. Eastland
(Chairman of the Board of Directors)
Date: October 10, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in their capacities and on the dates indicated.
Name Title Date
------ ------- ------
/s/ Larry L. Eastland Chairman of the Board, October 10, 2000
------------------------ and Chief Financial Officer
Larry L. Eastland
/s/ Robert L. Klosterman Chief Executive Officer, President October 10, 2000
------------------------ and Director
Robert L. Klosterman
/s/ Mark D. Stubbs Director October 10, 2000
------------------------
Mark D. Stubbs
12
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
TITLE PAGE
------- ------
INDEPENDENT AUDITOR'S REPORT................................................F-2
AUDITED FINANCIAL STATEMENTS
BALANCE SHEET.....................................................F-3 to F-4
CONSOLIDATED STATEMENTS OF OPERATIONS....................................F-5
CONSOLIDATED STATEMENTS OF MEMBERS'
CAPITAL (DEFICIENCY) AND STOCKHOLDERS' EQUITY.........................F-6
CONSOLIDATED STATEMENTS OF CASH FLOWS.............................F-7 to F-9
NOTES TO FINANCIAL STATEMENTS...................................F-10 to F-18
F-1
<PAGE>
Independent Auditor's Report
To the Board of Directors
GRAND SLAM TREASURES, INC.
Eagle, Idaho
We have audited the accompanying Balance Sheet of GRAND SLAM TREASURES, INC.
(formerly Northwest Parks LLC) (a Development Stage Company) as of June 30,
2000, and the related Consolidated Statements of Operations, Members' Capital
(Deficiency) and Stockholders' Equity and Cash Flows for the years ended June
30, 2000 and 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the accompanying financial statements referred to above present
fairly, in all material respects, the financial position of GRAND SLAM
TREASURES, INC. (formerly Northwest Parks LLC) (a Development Stage Company) as
of June 30, 2000, and the consolidated results of their operations and their
cash flows for the years ended June 30, 2000 and 1999, in conformity with
generally accepted accounting principles.
ARONSON, FETRIDGE & WEIGLE
Rockville, Maryland
September 29, 2000
F-2
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 2000
ASSETS
CURRENT ASSETS
Cash (Note 1) $ 2,682
Accounts receivable - affiliate (Note 4) 24,450
Inventory - sports memorabilia (Notes 1 and 8) 225,000
Prepaid expenses (Note 8) 2,070,000
-----------
Total current assets 2,322,132
-----------
PROPERTY AND EQUIPMENT, AT COST (NOTE 1)
Furniture, fixtures and equipment 81,547
Less: Accumulated depreciation and amortization (36,418)
-----------
Net property and equipment 45,129
-----------
OTHER ASSETS
Deposits 34,170
Capitalized project development costs (Note 1) 93,323
Investment in treasure (Notes 1 and 8) 2,984,250
Intangibles, net of $9,175 of accumulated amortization (Note 1) 523,555
-----------
Total other assets 3,635,298
-----------
TOTAL ASSETS $ 6,002,559
===========
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-3
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 2000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Loans payable - related parties (Note 3) $ 53,030
Accounts payable 72,535
Deficit in investment in affiliate (Notes 4 and 7) 212,764
-----------
Total current liabilities 338,329
-----------
COMMITMENTS AND CONTINGENCIES (NOTE 5) -
STOCKHOLDERS' EQUITY (NOTE 8)
Common stock - $.0001 par value per share, 100,000,000
shares authorized, 1,755
Additional paid-in capital 9,726,538
Losses accumulated during development stage (4,064,063)
-----------
Total stockholders' equity 5,664,230
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,002,559
===========
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-4
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1999 AND 2000 AND
THE PERIOD MARCH 28, 1996 (INCEPTION) TO JUNE 30, 2000
<TABLE>
Cumulative
From
Inception to
1999 2000 June 30, 2000
------ -------- ---------------
<S> <C> <C> <C>
REVENUE
Gain on sale of land $ 379,857 $ - $ 379,857
Gain on transfer of interest in equity investee (Note 4) 50,082 - 50,082
Miscellaneous - 3,376 4,562
--------- ---------- ------------
Total revenue 429,939 3,376 434,501
--------- ---------- ------------
EXPENSES
Research and marketing (Note 8) - 2,124,936 2,124,936
General and administrative 178,273 952,017 1,671,266
Interest 107,275 3,680 485,646
Loss on sale of land - - 117,265
--------- ---------- ------------
Total expenses 285,548 3,080,633 4,399,113
--------- ---------- ------------
NET INCOME (LOSS) BEFORE INTEREST IN LOSS OF EQUITY INVESTEES 144,391 (3,077,257) (3,964,612)
INTEREST IN LOSS OF EQUITY INVESTEES - (62,465) (99,451)
--------- ---------- ------------
NET INCOME (LOSS) $ 144,391 $(3,139,722) $ (4,064,063)
========= ========== ============
NET LOSS PER SHARE OF COMMON STOCK-BASIC AND DILUTED $ (.20)
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-5
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF MEMBERS'
CAPITAL (DEFICIENCY) AND STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1999 AND 2000
<TABLE>
Losses
Accumulated
Additional During
Common Stock Paid-in Contributed Development
Shares Amount Capital Capital Stage Total
-------- -------- ---------- ------------ -------------- -------
<S> <C> <C> <C> <C> <C> <C>
Members' equity, June 30, 1998 - $ - $ - $ 961,416 $(1,068,732) $(107,316)
Members' contributions in cash (Note 7) - - - 18,000 - 18,000
Net income for the year ended June 30, 1999 - - - - 144,391 144,391
---------- ------- ---------- ------------ ----------- ---------
Members' equity, June 30, 1999 - - - 979,416 (924,341) 55,075
Members' contributions in cash (Note 7) - - - 112,717 - 112,717
Exchange of capital for a 30.75% interest in
equity - - - 50,000 - 50,000
Exchange of capital for a 4.25% minority interest
in equity - - - 145,000 - 145,000
Exchange of members' equity for common stock
(Note 8) 15,113,267 1,511 1,285,622 (1,287,133) - -
Shares issued for sports memorabilia inventory
(Note-8) 53,000 5 224,995 - - 225,000
Shares issued for treasure (Note 8) 865,000 87 2,984,163 - - 2,984,250
Shares issued for $100,000 cash and intellectual
property 552,071 55 1,904,590 - - 1,904,645
Shares issued for services (Note 8) 217,750 22 739,743 - - 739,765
Shares issued for consulting services (Note 8) 750,000 75 2,587,425 - - 2,587,500
Net loss for the year ending June 30, 2000 - - - - (3,139,722) (3,139,722)
----------- ------- ---------- ------------ ----------- ----------
Stockholders' equity, June 30, 2000 17,551,088 $1,755 $ 9,726,538 $ - $(4,064,063) $5,664,230
=========== ======= ========== ============ =========== ==========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-6
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999 AND 2000 AND
THE PERIOD MARCH 28, 1996 (INCEPTION) TO JUNE 30, 2000
<TABLE>
Cumulative
From
Inception to
1999 2000 June 30, 2000
------ ------ ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $144,391 $(3,139,722) $ (4,064,063)
Adjustments to reconcile net income (loss) to net cash
used by operating activities
Loss on sale of property and equipment - 6,712 6,712
Common stock issued for operating costs - 2,504,132 2,504,132
Gain on sale of land, net (379,857) - (262,592)
Depreciation and amortization 17,512 24,391 70,621
Rent cancellation upon acquisition of LLC and joint - - 50,526
Gain on sale of interest in equity investee (50,082) - (50,082)
Interest in loss of equity investee - 62,465 99,451
(Decrease) increase in accounts payable (4,225) 55,313 144,577
Decrease in accrued interest (123,142) (79,683) 110,750
------------ ----------- ------------
Net cash used by operating activities (368,186) (438,451) (1,142,560)
------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Loan to equity investee - (24,450) (24,450)
Purchase of property and equipment (22,203) (23,275) (95,611)
Increase in deposits, net - (12,150) (35,170)
Loans to members - (56,396) (287,542)
Repayment of members' loans 34,900 86,996 287,542
Payment from equity investee for construction fee - 180,993 180,993
Proceeds from sale of land 1,209,200 - 1,391,935
Proceeds from sale of property and equipment - 5,243 5,243
Purchase of other assets - - (245)
Payment for land options (7,000) (34,000) (91,000)
----------- ----------- ------------
Net cash provided by investing activities 1,203,409 115,120 210,758
----------- ----------- ------------
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-7
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30, 1999 AND 2000 AND
THE PERIOD MARCH 28, 1996 (INCEPTION) TO JUNE 30, 2000
<TABLE>
Cumulative
From
Inception to
1999 2000 June 30, 2000
-------- -------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from equity investee $ 26,596 $ - $ 26,596
Proceeds from minority interest investment 145,000 - 145,000
Loans from members and related parties 5,209 53,030 682,239
Repayment of loans from members and related parties (620,209) - (629,209)
Proceeds from sale of common stock - 100,000 100,000
Proceeds from notes payable - - 350,000
Repayment of notes payable (350,000) - (350,000)
Contribution to members' equity 18,000 112,717 609,858
------------ ----------- ------------
Net cash (used) provided by financing activities (775,404) 265,747 934,484
------------ ----------- ------------
NET INCREASE (DECREASE) IN CASH 59,819 (57,584) 2,682
CASH AT BEGINNING OF PERIOD 447 60,266 -
------------ ----------- ------------
CASH AT END OF PERIOD $ 60,266 $ 2,682 $ 2,682
============ =========== ============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest $ 233,417 $ 83,363 $ 377,896
============ =========== ============
NONCASH INVESTING AND FINANCING ACTIVITIES
Capital contributions
1,885,750 shares of common stock issued for services, - 6,536,515 6,536,515
552,071 shares of common stock issue for $100,000 cash - 1,904,645 1,904,645
Exchange of capital for a 30.75% interest in equity - 50,000 50,000
Exchange of capital for a 4.25% minority interest in - 145,000 145,000
Land - - 300,000
16.67% interest in a limited liability company - - 36,986
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-8
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30, 1999 AND 2000 AND
THE PERIOD MARCH 28, 1996 (INCEPTION) TO JUNE 30, 2000
<TABLE>
Cumulative
From
Inception to
1999 2000 June 30, 2000
------- -------- ----------------
<S> <C> <C> <C>
NONCASH INVESTING AND FINANCING ACTIVITIES (CONTINUED)
Capitalized development costs by members of LLC, included $ - $ - $ 48,014
83.33% interest in an LLC and a 25% interest in a joint - - 97,275
Interest due to a member exchanged for a 15% interest in the (110,750) - (110,750)
Exchange of land for a 25% interest in an equity investee 67,958 - 67,958
---------- ------------ -------------
Total $ (42,792) $ 8,636,160 $ 9,075,643
========== ============ =============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
F-9
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and principles of consolidation
Northwest Parks LLC (NWP) was formed as a limited liability company on
March 28, 1996 under the laws of the State of Idaho for the purpose of
constructing, owning and operating multi-faceted theme parks along with the
related entertainment, retail, hospitality and recreational facilities.
On March 28, 1996, NWP acquired a 16.67% interest in BW Partners LLC
(BWP) and certain other assets and rights valued at $48,014, based upon the
amounts recorded by BWP from a member in exchange for a 25% interest in
NWP. The company from whom the BWP interest was acquired is a corporation
in which a managing member of NWP held a 20% interest at the time of the
acquisition. On January 8, 1998, NWP acquired the remaining 83.33% interest
in BWP in exchange for an 8.75% interest in NWP.
NWP formed Sweetwater Holdings LLC (SWH) on January 9, 1997, for the
purpose of acquiring approximately 12 acres of land and a dwelling in
Canyon County, Idaho, known as The Idaho Center property. NWP acquired a
99% interest in SWH, with the remaining 1% held by a minority member of
NWP. This transaction was accounted for as a purchase. In April 1999, SWH
transferred approximately 1.5 acres of the property to NWP and NWP sold SWH
with the remaining approximately 10.5 acres to a third party.
NWP participated in the formation of Crossroads Convenience Center LLC
(CCC) on June 18, 1998. Based upon the operating agreement, the Company
owned a 10% interest in CCC, after transferring a 15% interest in CCC to an
individual who is a minority member in the Company in partial satisfaction
of interest accrued on a note that was owed to the individual by NWP (Note
5). NWP's interest in CCC was acquired in exchange for the 1.5 acres of
property acquired from SWH and certain development costs incurred on CCC's
behalf.
In January 1999, NWP, along with its two managing members, formed
Magic Valley Parks LLC (MVP), with NWP acquiring a 98% ownership interest.
This transaction was accounted for as a purchase. In April 1999, NWP sold a
4.25% interest in MVP to two members of NWP for $145,000. On December 16,
1999 this 4.25% minority interest in MVP was exchanged for interests
totaling 1.45% of NWP, at which time MVP terminated operations.
F-10
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(A) Organization and principles of consolidation (continued)
On December 17, 1999, the members of NWP exchanged 100% of their
member interests for 80% of the outstanding common stock of Parks America!
Inc. (Parks) (formerly Wincanton Corporation), a company whose shares are
registered with the U.S. Securities and Exchange Commission. Parks had
ceased operations at the time of the exchange. NWP is considered the
acquiring entity in the exchange and has recorded the transaction as a
purchase with $14,985 of goodwill recognized as a result of the assumption
of certain liabilities of Parks.
On June 24, 2000, Parks changed its name to Grand Slam Treasures, Inc.
The accompanying financial statements include all of the accounts and
activities of the Company and its subsidiaries for the period in which the
majority ownership rested with the Company. This includes BWP, SWH, MVP and
Parks. CCC has been accounted for by the equity method of accounting. All
significant intercompany transactions and balances have been eliminated in
the consolidated financial statements.
(B) Use of accounting estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(C) Cash and cash equivalents
For purposes of financial statement presentation, the Company
considers all highly liquid debt instruments with initial maturities of
ninety days or less to be cash equivalents. From time to time, the Company
maintains cash balances which may exceed Federally insured limits. The
Company does not believe that this results in any significant credit risk.
(D) Inventory of sports memorabilia
The sports memorabilia was acquired in exchange for stock in the
Company (Note 8) and is valued at the estimated value of the inventory on
the date of acquisition. The inventory is held for sale by the Company
which is evaluating its options for sale of the memorabilia. The Company
continually re-evaluates the estimated recovery value of the memorabilia
and makes adjustments as necessary when they determine that the value has
been impaired.
F-11
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(E) Property and equipment
Property and equipment are recorded at original cost to the Company
and are depreciated over the estimated useful lives using the straight-line
method.
(F) Financial instruments
The fair value of all financial instruments included in the
consolidated financial statements is estimated by management to approximate
their recorded carrying amounts.
(G) Income taxes
As a limited liability company, all members recognize their respective
share of income or loss on their separate income tax returns. Accordingly,
prior to the exchange which resulted in the Company becoming a corporation,
income taxes have not been included in the accompanying financial
statements.
(H) Operating segments
The Company has been in a development stage since its inception and
considers itself to operate in only one business segment.
(I) Capitalized project development costs
The Company has capitalized and deferred direct costs incurred for
feasibility, market and site studies, promotional materials and preliminary
site development costs including design, engineering and architectural
drawings related to specific projects. When it is determined that a project
is not suitable or the project is abandoned, the capitalized development
costs are charged to expense. During the years ended June 30, 1999 and
2000, costs totaling $27,217 and $36,941, respectively, were written-off.
Costs of projects that are ultimately constructed and operated will either
be allocated to project assets or amortized over a five year period upon
commencement of operations.
(J) Intangible assets
Intangible assets consist primarily of intellectual property rights,
including copyrighted concepts, and goodwill acquired in the Company's
acquisition of Parks America, Inc. (Note 1 (a)) and are being amortized
over estimated useful lives of fifteen years. The intellectual property
rights consist of the internet domain name "Grand Slam" and "Noah's Rock".
The Company continually re-evaluates the value of intangibles and will make
any adjustments it deems necessary if it determines that the originally
recorded value has been impaired.
F-12
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(K) Loss per share of common stock
The basic net loss per share of common stock is based upon the
weighted average number of shares of common stock outstanding during the
year ended June 30, 2000. Diluted loss per share is the same as the basic
loss per share. Prior to the year ended June 30, 2000, the Company operated
as a limited liability company and did not have shares issued. Accordingly,
no per share amounts are presented for the year ended June 30, 1999 or
cumulatively since inception.
(L) Investment in treasure
During the year ended June 30, 2000, the Company acquired a
substantial portion of the artifacts and treasure of a Spanish galleon that
sank in deep water south of the Dry Tortugas in the Florida Keys in 1622.
The artifacts and treasure have both archeological and economic value. The
Company acquired the treasure in exchange for common stock of the Company
(Note 8) with the value based upon an appraisal of the treasure and
negotiations between the parties. The Company is considering its options
for maximizing the value of the treasure. Management estimates that the
value originally assigned to the treasure was a minimum value at the time
of the exchange. The Company continually re-evaluates the value of the
treasure and will make any adjustments it deems necessary if it determines
that the originally recorded value of the treasure has been impaired.
NOTE 2 - LAND OPTIONS
On April 2, 1998, the Company acquired an option for $50,000 to purchase 68
acres of land in Canyon County, Idaho. Under the terms of the option, the
Company had the right to purchase the land for $2.4 million during the one year
period expiring April 2, 1999. The option was extended for a one year period
with a purchase price of $2.64 million by payment of an additional $50,000,
payable $3,000 per month for six months, $4,000 per month for five months and
$12,000 as a balloon payment in April 2000. The agreement provided for an
additional one year extension period for $50,000, payable monthly, with the
option price increased to $2.9 million. The amounts paid for the option and all
extensions were non-refundable and were to be applied against the purchase price
upon settlement. On April 20, 2000, prior to the balloon payment, the Company
entered into a settlement agreement whereby the Company was released from any
and all remaining obligations under the option. As a result, all amounts that
had previously been paid under the option along with the related capitalized
project development costs (Note 1) were charged to general and administrative
expense during the year ended June 30, 2000.
F-13
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 2 - LAND OPTIONS (CONTINUED)
In September 1998, the Company acquired an option to purchase 32 acres of
land in Burley, Idaho, at a purchase price of $1.5 million for $1,000. The
option expired in May 1999. In August 1999, the Company obtained an extension of
the option period to May 30, 2000 for an additional $1,000. The amounts paid for
the option and all extensions were non-refundable and were to be applied against
the purchase price upon settlement. During the year ended June 30, 2000, the
Company abandoned the project to which the land option was related.
Consequently, all amounts that had previously been paid under the option along
with the related capitalized project development costs (Note 1) were charged to
general and administrative expense during the year ended June 30, 2000.
NOTE 3 - LOANS PAYABLE - RELATED PARTIES
The principal stockholders and members of the Company, who are also
officers of the Company, and a company owned by them have advanced funds to or
on the behalf of the Company in the form of either direct cash advances or
payments of expenses. These advances have no specific repayment terms, though
they are expected to be paid as funds become available. The balance due to the
stockholders and the related company was $53,030 as of June 30, 2000.
NOTE 4 - INVESTMENT IN AFFILIATE
At June 30, 2000, the Company owns a 40.75% interest in the Crossroads
Convenience Center LLC (CCC) which is located on "The Idaho Center" property in
Canyon County, Idaho. The Company's original interest in CCC was 25%. In April
1999, the Company transferred a 15% interest in CCC to a member of the Company
in partial payment of interest accrued on a previously paid note payable. The
amount of accrued interest considered paid by the transfer was $110,750 and the
apportioned basis of the interest in CCC was $60,668, resulting in a gain on the
transfer to the Company of $50,082. The Company's 10% ownership interest at June
30, 1999 was increased by 30.75% to 40.75% during 2000 in exchange for an equity
interest in NWP, which was subsequently exchanged for 11,090 shares of the
Company's common stock.
Prior to fiscal year 2000, CCC had been developing and constructing an
automobile service center and convenience store and had no significant
operations. The Company served as the construction manager for the center for
which it received fees of approximately $181,000 and $165,000 for the years
ended June 30, 2000 and 1999, respectively. The service center and convenience
store commenced operations in August 1999.
F-14
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 4 - INVESTMENT IN AFFILIATE (CONTINUED)
A summary of the financial position and results of operations of CCC as of
and for the year ended June 30, 2000 follows:
Financial position
Current assets $ 88,000
Other assets 1,520,000
-------------
Total assets $ 1,608,000
=============
Current liabilities $ 157,000
Other liabilities 1,110,000
Members' equity 341,000
-------------
Total liabilities and members' equity $ 1,608,000
=============
Results of operations
Revenue $ 2,125,000
=============
Net loss $ (165,000)
=============
Company's share of loss $ (62,465)
=============
The Company's investment in CCC has been reduced by construction management
fees paid by CCC to the Company which, along with the Company's share of CCC's
losses, resulted in a deficit in the Company's investment in CCC at June 30,
2000 of $212,764. This deficit has been classified as current as of June 30,
2000 because the Company is attempting to sell its interest in CCC. The Company
expects to complete the sale within the next year.
NOTE 5 - LEASES
The Company is obligated, as lessee, under a noncancellable operating lease
effective March 1, 2000 for office space in Eagle, Idaho which expires in
February 2005. The lease provides for fixed minimum annual rent increases of 5%
each lease year which are considered to be part of the total minimum lease
amount and are recognized as rent expense over the term of the lease on a pro
rata basis. The lease contains an option for renewal for an additional term of
five years at a rental rate that increases 5% each year over the previous year's
rent.
The Company is also obligated, as lessee, under noncancellable operating
leases for two vehicles which expire in November 2000 and November 2001. These
leases are in the names of the two principal executive officers of the Company
acting as nominee for the Company.
In most cases, the Company expects that operating leases will be renewed or
replaced by other operating leases in the normal course of business.
F-15
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 5 - LEASES (CONTINUED)
As of June 30, 2000, the future minimum payments required under all
operating leases with initial and remaining terms in excess of one year were as
follows:
Year Ending Office
June 30, Space Vehicles Total
-------------- --------- ---------- -------
2001 $ 30,600 $ 9,777 $ 40,377
2002 30,904 2,805 33,709
2003 31,828 - 31,828
2004 32,785 - 32,785
Thereafter 22,287 - 22,287
--------- --------- ----------
Total $ 148,404 $ 12,582 $ 160,986
========= ========= ==========
Total rent expense to the Company under all long-term leases for the years
ended June 30, 1999 and 2000 was $14,741 and $24,240 respectively.
NOTE 6 - INCOME TAXES
The benefit for income taxes for the year ended June 30, 2000 varies from
the amount which would have been computed using statutory rates as follows:
Federal income tax benefit at the maximum statutory rate $1,067,500
State income benefit, net of Federal tax effect 165,800
Income tax attributable to the period the Company was a limited (103,900)
Valuation allowance (1,129,400)
-------------
Benefit for income taxes $ -
=============
For income tax purposes, the Company has a net operating loss carryforward
of approximately $2,875,000 at June 30, 2000, that, subject to applicable
limitations, may be applied against future taxable income. If not utilized, the
operating loss carryforward will expire on June 30, 2020.
F-16
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 7 - MEMBER INTERESTS
The Company was formed as a limited liability company in March 1996. During
the year ended June 30, 1999, members contributed $18,000 to the capital of the
Company in exchange for an aggregate .18% interest in the Company. During the
period from August to December 1999, two members acquired an additional 1.13%
interest in the Company for $112,717 in cash.
Effective September 1, 1999, the Company increased its interest in CCC by
30.75% in exchange for a .50% member interest in the Company (Note 4). This
exchange was valued at $50,000 by agreement of the parties to the exchange.
On December 16, 1999, the Company granted a 1.45% percentage interest in
the Company to two members in exchange for their aggregate 4.25% interest in
MVP. The exchange was valued at $145,000 by agreement of the parties to the
exchange.
NOTE 8 - COMMON STOCK
Effective December 17, 1999, the members of NWP exchanged 100% of their
member interests for 80% of the outstanding common stock of Parks. The exchange
was recorded in a manner similar to a pooling of interests with NWP being the
surviving entity as a corporation. The members of NWP acquired 12,000,000 shares
of Parks in the exchange and 3,000,000 shares of Parks were issued to other
parties for services in connection with the exchange. The shares issued for
services were recorded at par value by the Company. At the time of the exchange
there were 113,267 shares of Parks outstanding.
On March 16, 2000, the Company issued 53,000 shares of its common stock to
an unrelated party for an inventory of sports memorabilia that was valued at
$225,000, based upon the approximate fair value of the inventory at the date of
the transaction.
On March 24, 2000, the Company issued 865,000 shares of its common stock to
acquire the recovered treasure of a Spanish galleon that sank in 1622. The value
of the exchange recorded by the Company of $2,984,250 was based upon original
appraisals of the treasure and negotiations between the parties based upon
management's estimates of the value of the treasure.
F-17
<PAGE>
GRAND SLAM TREASURES, INC.
(FORMERLY NORTHWEST PARKS LLC)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 8 - COMMON STOCK (CONTINUED)
On April 1, 2000, the Company issued 150,000 shares of its common stock to
acquire an internet site, Skreem.com, from an unrelated party. The acquisition
was valued based upon the approximate quoted market price of the shares on the
date of the transaction, which was $517,500. In addition, on May 12, 2000, the
Company issued 402,071 shares of its common stock to an entity that assisted it
in acquiring Skreem.com and in settling various other transactions and for
$100,000 that the entity had previously loaned to the Company. This transaction
was valued at $1,387,145 based upon the market value of the Company stock at the
date of the transaction. These two transactions represented an aggregate of
552,071 shares issued valued at $1,904,645.
During April and May 2000, the Company settled certain outstanding
obligations by the issue of 217,750 shares of its common stock to the vendors.
The transactions were valued at the average quoted price of the Company's stock
during the period of the issuance which totaled $739,765.
On May 11, 2000, the Company issued 750,000 shares of its common stock
valued at $2,587,500, based upon the quoted market price of the Company's stock
on that date, for a consulting service contract covering the period April 20,
2000 to June 30, 2001. Of the value recorded, the amount of $517,500 was
expensed as marketing and research and $2,070,000 is reported as prepaid expense
at June 30, 2000 . The prepaid amount will be amortized ratably over the term of
the agreement.
